TommyWonk

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Tuesday, September 29, 2009

"The carbon-based free lunch is over."

So says John W. Rowe, CEO of Exelon, one of the nation's largest utilities. The New York Times reports that Exelon is the latest company to quit the U.S. Chamber of Commerce over the organization's opposition to climate change legislation. Rowe doesn't think that the end of free carbon means we are heading for an era of deprivation:

"Breakthroughs on climate change and improving our society’s energy efficiency are within reach."

Business leaders are particularly embarrassed by the call by a Chamber of Commerce vice president for a “Scopes monkey trial of the 21st century” to try the question of climate change. Utility executives, who have to have at least a passing acquaintance with science to do their jobs, don't like looking like yahoos.

Saturday, September 26, 2009

The Obscure Dr. Carlin

Economists have a hard time agreeing with each other. So why is the story that an obscure economist disagrees with climate scientists such a big deal? Alan Carlin has toiled in obscurity for years as an analyst in the EPA's National Center for Environmental Economics. Even though his work focuses on cost-benefit analysis and market incentives, Carlin hurriedly prepared lengthy, and admittedly sloppy comments refuting the scientific consensus on global warming. (Perhaps he thought his own science wasn't dismal enough.) Not being a climate scientist, Carlin presented no new scientific findings. Not surprisingly, EPA officials did not see fit to include his comments, which included no new science, in the agency's findings.The New York Times reports that the uproar among conservatives who have claimed that Carlin's findings were suppressed are not supported by the facts of the situation:

Dr. Carlin remains on the job and free to talk to the news media, and since the furor his comments on the finding have been posted on the E.P.A.’s Web site.

Carlin's website includes this shot of him explaining his views to Glenn Beck, whose credentials includes neither economics or climate science:Nevertheless, climate skeptics are pushing his story as evidence that global warming is a hoax that persists only because proponents are suppressing dissenting views.

Friday, September 25, 2009

The G20 and Financial Reform

The Guardian yesterday posted my thoughts on the G20 discussions on the need for financial oversight reform. G20 leaders are looking at reining in the outlandish pay packages that rewarded banker for taking on excessive risk. But the most important task facing regulators is getting on top of the burgeoning trade in derivatives:

But it's the large, unregulated systemic risks that keep regulators up at night. Consider the case of AIG. As last year's financial contagion metastasised, US regulators found they had little legal leverage until the insurance giant was bailed out with $85bn in return for an 80% stake in the company. Insurance companies are regulated by the 50 states, a balkanised system that is unlikely to change.But it wasn't AIG's traditional insurance lines that got the giant in trouble. Even though AIG's financial products group had its tentacles in nearly every global financial institution, the only federal regulatory agency that had any jurisdiction over the company was the office of thrift supervision. The OTS is a small agency that oversees savings and loans, like the one portrayed in the classic Jimmy Stewart film It's a Wonderful Life. There was no agency that had regulatory oversight on AIG's billions in credit default swaps, for which the firm had not set aside any reserves.

Other reforms would be useful; getting oversight of unregulated derivatives is essential.

Consert attached controllers on hot water heaters, air conditioners and pool pumps and then let customers go online and set targets for their monthly electricity bill. Smart meters and a wireless communications system provide real-time electricity consumption data to allow the utility to cycle appliances on and off to achieve the savings and help it manage peak demand.

This is just one of many cost effective technologies for reducing energy use without sacrificing comfort or quality of life. Delaware has just adopted legislation that set a target of 15 percent electricity reduction by 2015. Smart meters and other cost effective technologies will help Delaware's homes and businesses meet the standard while saving money and boosting our economy.

Wednesday, September 23, 2009

Is the Earth Actually Cooling?

Opponents of action on climate change are doing their worst to interpret the data to obfuscate the unmistakable trend of global warming. Today, their bamboozlement made it into the newspaper of record. The canard that global temperatures are somehow stabilizing or even cooling off was repeated in the New York Times:

The world leaders who met at the United Nations to discuss climate change on Tuesday are faced with an intricate challenge: building momentum for an international climate treaty at a time when global temperatures have been relatively stable for a decade and may even drop in the next few years.

The chart shows a clear trend towards warming, even with the anomalous year of 1998. If you take a large enough data set—and the evidence for global warming encompasses lots of data—it should be easy to find two data points that buck the overall trend. That's just what the skeptics have done. But no one with any serious understanding of statistics (or thermodynamics) could possibly mistake the warming trend.

Monday, September 21, 2009

Assateague Island

A few days of camping in Assateague State Park gave me plenty of time and inspiration to ponder nature in all its power and fragility. Assateague Island is a thin strip of sand that stands up to the relentless pounding of the wind and waves of the Atlantic Ocean. The narrow dune that keeps the island from being washed away is protected by an electric fence.The island's flora and fauna cling to narrow niches. Mole crabs inhabit a few feet of beach in between low and high tides. Ghost crabs occupy the few feet of beach above the high water mark. A stiff north wind early one morning nearly blew our tent over. I've felt the same wind in Cape Henlopen and in Rehoboth.As the Baltimore Sun reported last week, the State of Maryland is asking offshore wind power developers to submit ideas for exploiting the considerable wind resource of the state's beaches. Based on the responses it gets from the industry, Maryland plans to craft a procurement process that could include issuing a request for proposal next year.

We're used to simply tossing trash in a bin and forgetting about it. But as landfill space is used up, we will need to better understand, manage and recycle our refuse.The project is being managed by MIT's Senseable City Lab, which uses technology to better understand how cities work. Waste Management, Inc. is helping to fund the project.

Tuesday, September 15, 2009

Health Externalities of the Food Industry

Well, there's nothing I like so much as readers who think, so let's take a closer look at the environmental problems created by the food industry. Yesterday I wrote that "chronic diseases like renal failure and diabetes are some of the largest environmental externalities ever visited upon the public."Economic externalities are costs that don't show up in a company's financial statements. A simple example would be dumping toxins in the water supply. The company may not show a liability on its balance sheet, but some one will pay the cost: either neighbors who bear an elevated health risk or government shouldering the cleanup costs. Often the externality costs exceed the costs avoided by the polluter.The food industry in this country boasts of its efficiency, but the low cost of the food it sells does not include the consumer health risks created by the modern food economy. Yesterday I mentioned the growing costs of chronic diseases like diabetes and renal failure. Another health hazard is created by the use of antibiotics in animal feed to promote growth and prevent disease among animals that are raised in their own excrement, as described by this researcher at Johns Hopkins:

Kellogg Schwab, director of the Johns Hopkins Center for Water and Health, refers to a typical pig farm manure lagoon that he sampled. "There were 10 million E. coli per liter [of sampled waste]. Ten million. And you have a hundred million liters in some of those pits. So you can have trillions of bacteria present, of which 89 percent are resistant to drugs. That's a massive amount that in a rain event can contaminate the environment."

Does this sound worrisome to you? It should. Schwab says, "This development of drug resistance scares the hell out of me."

Monday, September 14, 2009

Michael Pollan on Big Food and Big Insurance

According to the Centers for Disease Control and Prevention, three-quarters of health care spending now goes to treat “preventable chronic diseases.” Not all of these diseases are linked to diet — there’s smoking, for instance — but many, if not most, of them are.We’re spending $147 billion to treat obesity, $116 billion to treat diabetes, and hundreds of billions more to treat cardiovascular disease and the many types of cancer that have been linked to the so-called Western diet. One recent study estimated that 30 percent of the increase in health care spending over the past 20 years could be attributed to the soaring rate of obesity, a condition that now accounts for nearly a tenth of all spending on health care.

But health care reform could change the way insurance companies respond to chronic diseases.

As for the insurers, you would think preventing chronic diseases would be good business, but, at least under the current rules, it’s much better business simply to keep patients at risk for chronic disease out of your pool of customers, whether through lifetime caps on coverage or rules against pre-existing conditions or by figuring out ways to toss patients overboard when they become ill.But these rules may well be about to change — and, when it comes to reforming the American diet and food system, that step alone could be a game changer. Even under the weaker versions of health care reform now on offer, health insurers would be required to take everyone at the same rates, provide a standard level of coverage and keep people on their rolls regardless of their health. Terms like “pre-existing conditions” and “underwriting” would vanish from the health insurance rulebook — and, when they do, the relationship between the health insurance industry and the food industry will undergo a sea change.

The costs of chronic diseases like renal failure and diabetes are some of the largest environmental externalities ever visited upon the public. These costs don't show up in the subsidized, low cost ingredients that make up most of the food products in our supermarkets, but are born by the unfortunate consumers who are making seemingly rational decisions by eating cheap, though ultimately unhealthy food.If the health insurance industry is forced to take on the growing costs of chronic disease, then these externalities will be shifted from families with little political or market power to large corporations with enormous political and market power. The insurance companies' assumption of the costs of chronic diseases could help shift the balance of political power away from the food industry.

Friday, September 11, 2009

Rob Robinson in the 37th House District

Saturday's special election in the 37th House District presents a clear choice when it comes to environmental, energy and land use issues.Ruth Briggs King, the Republican candidate, works for the Sussex County Association of Realtors and talks about protecting property rights, a phrase used to argue against environmental and land use protections.Rob Robinson, the Democratic candidate, chairs the Georgetown Planning & Zoning Commission and has served on the board of the Delaware Preservation Fund. While respecting the legitimate interests of property owners, he seems to understand the threat that unchecked sprawl presents to the natural resources and quality of life in southern Delaware. The Delaware Chapter of the Sierra Club has endorsed Robinson. The two candidates submitted answers to a questionnaire, which were circulated to members without the candidates' names attached. The verdict among members was clear: Candidate #1, who turned out to be Robinson, gave the stronger answers across the board on issues including protecting the inland bays, recycling, and energy conservation.On this subject, the difference between the candidates was striking. On energy policy, Ruth Briggs King wrote, "I do not believe you can legislate personal responsibility." She sounds more than a little like Dick Cheney in 2001, when he proclaimed, "Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy."Actually, Delaware has made conservation the basis for our energy policy. Senate Bill 106, which Rob Robinson specifically endorsed, and passed the General Assembly with only one dissenting vote, creates energy efficiency resource standards for electricity and natural gas. One candidate is clearly in Delaware's mainstream on forward looking energy policy, while the other sounds like an acolyte of Dick Cheney. As I said, the differences couldn't be clearer.

Wednesday, September 09, 2009

Chad Tolman on Climate Change

The News Journal today published an op-ed by Chad Tolman on climate change. Chad may be Delaware's number one advocate for reversing global warming. He's a physical chemist who has studied the subject extensively, so he knows the subject in great detail. I have listened to him describe arcane points like changing ocean chemistry and the threat of methane release from thawing tundra.This op-ed covers the basics, including what a climate change bill needs to achieve to be effective.

Cost of polluting needs to be highDELAWARE VOICEBy CHAD TOLMAN

The science of global climate change is solid, in spite of what you may have read from climate change deniers. Human activities -- especially the burning of fossil fuels (coal, oil and natural gas) and destruction of tropical forests -- are increasing the atmospheric concentrations of greenhouse gases (GHGs) and upsetting the energy balance between visible radiation absorbed from the sun and infrared radiation from Earth going back into space. Of the major GHGs -- water vapor, carbon dioxide (CO2), methane, nitrous oxide, ozone and fluorochemicals -- CO2 is the major concern. It stays in the atmosphere for centuries and has increased in concentration by 38 percent since the beginning of the Industrial Revolution, from 280 to nearly 390 ppm (parts per million by volume), and is increasing by over 2 ppm per year. Annual CO2 emissions from human activities are over 30 billion tons, and have been increasing by about 3 percent each year. Since 1750, global average temperatures have increased by about 0.8 degrees Celsius (1.5 degrees Fahrenheit), mostly during recent decades. Scientists and policy makers, in the U.S. and other countries, have generally agreed that an increase of more than 2 degrees Celsius (3.6 degrees Fahrenheit) could cause serious damage to the climate system, and must be avoided. That may not sound like much, but keep in mind that the coldest time during the last ice age, 20,000 years ago, was only about 6 degrees Celsius cooler than it is today; sea levels were lower by about 400 feet! Continuing business as usual during this century could cause a warming of 6 degrees Celsius or more, with catastrophic results. (Delaware has an average elevation of only 65 feet above sea level and is particularly vulnerable.) The concentration of CO2 and other GHGs that will cause the global average temperature to increase over 2 degrees Celsius is not known precisely, but is probably in the range of 350 to 450 ppm, and might be less than 350. (The atmosphere already has close to 390 ppm CO2, but it takes a long time to warm the oceans and melt mile-thick ice.) That means that GHG emissions must stop growing soon, and must then be decreased as rapidly as possible to near zero or even negative (meaning that more CO2 is absorbed by human activities than is emitted). The only practical way to discourage these emissions is by raising their price enough -- either through a direct carbon tax or a cap-and-trade system that sets a declining cap on GHG emissions. The principle is: The polluter pays. We already have a system like that for CO2 emissions from electric power plants in 10 states, including Delaware, called the Regional Greenhouse Gas Initiative. The energy bill passed by the U.S. House of Representatives in June involves a national cap-and-trade system for most of the economy. It aims to reduce U.S. GHG emissions to 83 percent of their 2005 levels (about their 1990 levels) by 2020 and to less than 20 percent of their 1990 levels by 2050. It's a good start, but it needs to be strengthened in the Senate. Important features of a good Senate bill include: • U.S. leadership in reducing per capita GHG emissions. • Greater incentives to improve energy efficiency (including clean transportation) and to replace fossil fuels by renewable energy sources -- fewer free emission allowances for polluters. • Dealing with the oldest and dirtiest coal plants. • Supporting education and job training for the new green energy economy. • Working with developing countries to reduce their emissions and adapt to climate changes that cannot be avoided. • Boldly reducing U.S. GHG emissions is essential if we are to convince other big emitters like China to reduce theirs. Our per capita emissions are among the highest in the world -- over four times those of China and about twice those of most other industrialized countries. Getting back to 1990 in 2020 won't do it. A recent study by the American Council for an Energy Efficient Economy shows that we could get half of the emission reductions we need by using energy more efficiently. The rest can come from replacing fossil fuels by renewable energy sources. Here in Delaware, our largest and least expensive renewable resource is offshore wind. Let's get going to develop it fully and create jobs right here in Delaware. Chad Tolman, who holds a doctorate in physical chemistry, has been studying and teaching about energy and climate change for more than 20 years. He is the Energy Chair of the Delaware Chapter of the Sierra Club and serves on the LWV US Climate Change Task Force.

Tuesday, September 08, 2009

Should Education Be Compulsory?

The furor over Barack Obama's address to our nation's schoolchildren seems silly, even in a season noted for inanity. But could the critics have a point? Could Obama be using his seemingly innocuous speech to schoolchildren to indoctrinate them? Obama's supporters point out that the stay-in-school message shouldn't be controversial. But is it?After all the children in question are in school pursuant to the doctrine of compulsory public education, which has a coercive, even authoritarian ring to it. Universal education is declared a right, and at the elementary level should be compulsory, under Article 26 of the Universal Declaration of Human Rights:

(1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.

Do we really want the United Nations telling us that we should use the power of government to compel our children to attend school? Think about it.

Thursday, September 03, 2009

Energy Savings at the Dover Air Force Base

DOVER -- Some $25 million in federal stimulus money has been issued for a major energy efficiency project at Dover Air Force Base -- including the retirement of an inefficient steam plant that provides heat to more than 70 buildings on the 3,900-acre base.

The story makes four useful points about the economics of energy conservation. First, the project doesn't involve exotic technology, though the savings will be substantial:

Steve Kalmer, energy manager for the Air Mobility Command, DAFB's parent organization, said last October that up to 55 percent of heat generated by centralized steam plants was lost during transportation to remote buildings and facilities.

Second, energy efficiency standards aren't just for wimpy Democrats. The project meets the requirements of Executive Order 13423 issued by President George W. Bush:

Sec. 2. Goals for Agencies. In implementing the policy set forth in section 1 of this order, the head of each agency shall:(a) improve energy efficiency and reduce greenhouse gas emissions of the agency, through reduction of energy intensity by (i) 3 percent annually through the end of fiscal year 2015, or (ii) 30 percent by the end of fiscal year 2015, relative to the baseline of the agency’s energy use in fiscal year 2003...

Third, reducing energy use doesn't require rationing or reducing productivity. Nowhere does the Order specify that federal agencies work fewer hours or cut their output by 30 percent. The Dover Air Force Base won't have to shut down two days a week or schedule fewer flights to meet the energy efficiency standards of E.O. 13423.Fourth, the capital investment required to create the energy savings will pay dividends for years to come. The stimulus program will disappear after two years, but the savings created by investing in energy efficiency will last for decades.

Wednesday, September 02, 2009

Not Dead Yet

Friends, family and acquaintances have been inquiring into my well being since my name popped up in a list of abandoned accounts published by ING Direct in the News Journal yesterday and today. Happily, I'm not dead yet, and have confirmed that my savings account is intact and not going anywhere.Money advisers tell us we should sock away our money and leave it there, which is just what I did with this account. I hadn't deposited or withdrawn any money from the account for several years, which is probably why it ended up on the inactive list.This led to some minor engagement with customer service and an outpouring of concern from my friends and fans. Two lawyers alerted me, and did not bill me for their time, though one recalled that he owed me a lunch. A right leaning blogger e-mailed me yesterday, citing his concern for my financial well being as evidence that he is indeed "a kinder, gentler conservative."Banks periodically publish lists of inactive accounts that, after a long enough time, may be declared abandoned. Those that aren't claimed revert to the public treasury. The State of Delaware expects to collect $375.6 million in abandoned assets in the current fiscal year; my modest savings account is a drop in the bucket. Besides, I helped out last year when I didn't bother to cash a state income tax refund check for the sum of one dollar. Having already made this modest contribution to keeping our state government afloat, I thought I'd hold on to my savings account.

Tuesday, September 01, 2009

Waxman-Markey Would Cost Delawareans $3.20 a Month

Yesterday, I took note of a Washington Post/ABC News poll that shows that 58 percent of the public would support action on climate change if it cost no more than $10 month.According to analysis performed by M.J. Bradley & Associates, an environmental consulting firm, the average increase in residential energy costs due to Waxman-Markley in 2012 would be $3.20 a month in Delaware. The largest increase would be $7.45 per month in North Dakota. Four states (Idaho, Oregon, Vermont and Washington) would see their average monthly bills decline somewhat. The figures are based on household usage of 1,000 KWh per month and an assumed price of $15 per metric ton for carbon dioxide should Waxman-Markley be adopted. Also, the analysis is based on the assumption that consumers would not switch to more cost effective fuels or reduce their demand due to higher prices—a fair assumption given such modest anticipated cost increases.